Times have changed, we have entered the era of the digital and knowledge based economy. We are seeing the rise of the Exponential Organisation. According to Sarah Horowitz, U.S. Bureau of Labor Statistics, we are living through the biggest Industrial Revolution of our time.
With the current pace of technological developments, the digitisation of organisations, and the advent of Big Data, life as we know it has changed. As the current trends in organisational lifespans show, it is once again a process of adapt or die – but this time at break neck speed. In order to survive in this tech savvy world organisations must undergo a deep cultural shift. For the traditional organisation the culture is still very much one based on ownership, command and control and a dominant mind set of scarcity. As Salim Ismail, author of Exponential Organisations, notes “Our organisational structures have evolved mainly to manage scarcity of people, money, and assets / resources. The concept of ownership works well for scarcity.”
However, what we are observing in organisations that have embraced the shift away from a scarcity mindset, those that have opened themselves up to collaboration, sharing, and contributing, is that their “Abundance based reality” is leading to their exponential growth. According to Ismail “Accessing or sharing works better in an abundant information based world” – Exponential Organisations.
Even though we are observing this exponential growth of those organisations that have “shifted,” we are still trying to quantify, predict and manage this growth using linear mindsets. Therefore, to truly embrace this shift, we need to start thinking exponentially around the way in which our organisations are structured and how they function. This will enable our organisations to match the scale and growth we see in technology and to embrace the increasingly rapid pace change. According to Deloitte “the rate of change has accelerated. Fifty years of operating under Moore’s Law— the axiom that computing power doubles every two years—have not only propelled technology innovation forward but also significantly increased the pace of change in business as a whole, requiring organizations to be more agile.” Deloitte – Global Human Capital Trends 2016. This view is consistent with the view Ismail expressed in Exponential Organisations, “We’ve learned how to scale technology (mainly cloud computing since 2006). Now it’s time to scale the Organisation: strategy, structure, process, culture, KPI’s, people, and systems.” – Exponential Organisations.
One of the ways for organisations to reinvent themselves and to enable exponential growth is to embrace what the Deloitte study terms digital HR, “while digital disruption and social networking have changed the way organizations hire, manage, and support people. Innovative companies are figuring out how to simplify and improve the work experience by applying the disciplines of design thinking and behavioral economics, embracing a new approach that we call “digital HR.” Deloitte Global Human Capital Trends 2016. What is key here is for organisations to welcome the new breed of worker. This new breed of worker is not concerned with permanent employment. This breed of worker does not want to be “owned.” Instead what they want is to offer the use of their talents to organisations for fixed and flexible periods of time. “A new social contract is developing between companies and workers, driving major changes in the employer employee relationship. The days when a majority of workers could expect to spend a career moving up the ladder at one company are over. Young people anticipate working for many employers and demand an enriching experience at every stage. This leads to expectations for rapid career growth, a compelling and flexible workplace, and a sense of mission and purpose at work. Today, contingent, contract, and part-time workers make up almost one-third of the workforce, yet many companies lack the HR practices, culture, or leadership support to manage this new workforce.” Deloitte Global Human Capital Trends 2016.
This new breed of worker offers increased organisational agility. They offer a solution to the talent crises – a flexible workforce able to bridge the talent gap at a competitive price. “Winning the Talent War requires a fundamental shift in HR strategies. Companies must seek new ways to find the right talent, develop skills, and share expertise.”-Mike Ettling, President, HR Line of Business, SAP.